Dynamic Bargaining Agreements Between Three Players

• Main Author: Weiss, Nicholas
• Format: Others
• Published: Scholarship @ Claremont 2015
• Subjects: bargaining; game theory; dynamic; three-player; Economic Theory
• Online Access: http://scholarship.claremont.edu/cmc_theses/1018; http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=2066&context=cmc_theses

This paper modifies the two-player Rubinstein bargaining game to include a third player. Analyzing the game through a dynamic model provides parametric changes that cause a longer negotiation period and fewer concessions from each player’s initial demand upon an agreement. The introduction of a free rider problem and limited computational abilities cause these consequences with the addition of a third player. The free rider problem discourages players from conceding their demands and since players have limited strategic abilities, the additional player requires more effort for players to understand the game and thus more time to understand the environment enough to reach an agreement.